MagneGas Applied Technology Solutions, Inc.’s (NASDAQ:MNGA): MagneGas Applied Technology Solutions, Inc., an alternative energy company, creates and produces hydrogen based fuel through the gasification of liquid and liquid waste in the United States and internationally. With the latest financial year loss of -US$16.0m and a trailing-twelve month of -US$19.5m, the US$38m market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on MNGA’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for MNGA, its year of breakeven and its implied growth rate.
Consensus from the 3 Chemicals analysts is MNGA is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$1.6m in 2021. MNGA is therefore projected to breakeven around 3 years from now. What rate will MNGA have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 62%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for MNGA given that this is a high-level summary, though, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one aspect worth mentioning. MNGA has managed its capital prudently, with debt making up 5.9% of equity. This means that MNGA has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
There are too many aspects of MNGA to cover in one brief article, but the key fundamentals for the company can all be found in one place – MNGA’s company page on Simply Wall St. I’ve also compiled a list of pertinent factors you should look at:
- Valuation: What is MNGA worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether MNGA is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on MagneGas Applied Technology Solutions’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.